Politics

The lottery’s going online. Here’s what to know.

The new state budget allows the Massachusetts Lottery to begin online sales, a move that's expected to raise millions for early childhood education and care.

Governor Maura Healey's budget proposal seeks to allow the Massachusetts State Lottery to start an online program, called iLottery. AP Photo/Charles Krupa, File

By Abby Patkin

July 30, 2024

3 minutes to read

The Massachusetts State Lottery is finally entering the internet age following years of talk but little traction on Beacon Hill.

Included in the nearly $58 billion state budget Gov. Maura Healey signed Monday is a section authorizing online lottery games in hopes of raising funds to support a grant program for early childhood education and care.

Advocates for the so-called “iLottery” have long maintained that internet-based lottery games are a way to target younger, more digitally savvy players and keep state lottery revenues up amid a rise in online sports betting. Critics — particularly retailer trade groups — have raised concerns about the possible competition for brick-and-mortar stores that sell lottery tickets.

“Our team is excited to implement an online Lottery,” Mark William Bracken, executive director of the Massachusetts Lottery, said in a statement following Monday’s budget signing.

“We are ready and prepared to offer our players a modern lottery experience in a safe and accessible environment,” he continued. “At the same time, the Lottery is unwavering in its commitment to our dedicated retail partners who have helped us become the most successful lottery in the country.”

The online lottery battle:

When will online lottery sales start?

In the same news release, Lottery officials said they anticipate it will take about 16 months to get the online games up and running. In other words, Bay Staters may not see the launch of online lottery sales until late 2025.

What are the rules?

While the age requirement for in-person Massachusetts Lottery sales is still 18, online customers will need to be at least 21 years old to participate, and the platform will require age verification, per the new regulations.

The regulations include measures to discourage gambling addiction behavior — for example, establishing maximum deposit or transaction limits and allowing players to reduce their own limits at any time. As a nod to brick-and-mortar retailers, the Massachusetts State Lottery Commission is also required to implement promotional activities that encourage players to spend in stores as well.

Still, Massachusetts Package Stores Association Executive Director Robert Mellion said retailers feel “left out in the cold” with the legalization of online lottery sales.

Stores benefit from the foot traffic lottery sales bring, he noted in a phone interview, adding, “This is going to result in traffic being removed from these Main Street businesses all over the state.”

He said online lottery sales pose a particularly devastating challenge to retailers in light of the past few years, which saw both the COVID-19 pandemic and record inflation. Once iLottery launches, Mellion argued, the state will essentially be competing against retailers — and on the taxpayers’ dime.

“It’s just turning the state into an online casino,” he said. “That doesn’t end well for local retail.”

Cannibalization has long been a concern among iLottery detractors, though some research has suggested online lottery sales do not cut into traditional sales in states that offer both.

Where will online lottery revenue go?

Lawmakers and advocates, meanwhile, have underscored the financial benefits of an online lottery. The Massachusetts Lottery boasted an estimated $1.157 billion in net profit for the state during the 2024 fiscal year, which pays out in the form of unrestricted local aid to all 351 cities and towns.

Earlier this month, the Legislature said a portion of the new revenue from online lottery sales — an estimated $100 million in fiscal year 2025 — will fund Commonwealth Cares for Children (C3) Grants.

State Treasurer Deborah B. Goldberg, who chairs the Massachusetts State Lottery Commission, said officials are “excited to get to work” on bringing online lottery sales to fruition.

“We are prepared to implement a safe and reliable iLottery that will produce significant resources for critical childcare services, which are so desperately needed across the state,” she said in a statement.